As a new year dawns people are apt to make predictions, so I have decided I would write what I have been thinking and voicing to clients over the last year. My personal predictions for the Northern Delaware Real Estate market.
I believe that Real Estate has an 11/12 year cycle, as we note when looking at the market in the late 1990’s we were coming out of cycle then, I think we will see an increase in values in Northern New Castle County (North of the Canal, I won’t make predictions about the MOTS – Middletown, Odessa, Townsend and Smyrna for those not initiated, area). The increase for 2010 will be gradual and small, considering that some areas have seen 20% declines in value since 2006 (peak feeding frenzy market), I expect to see between 5-7% increase in value, depending on where in the market you are. I think that higher priced properties will be the slowest to recover due to the difficulty in obtaining Jumbo loans, but a great opportunity for move-up Buyers coming out of the $275-400,000 price point who have equity from purchases prior to 2004. That in turn will also make available more great deals on properties for prepared First-time purchasers, as I have not seen a lot of nice property options in the low $200,000 price point in this marketplace since 2003, this is certainly a great opportunity.
Homes that in 1999 were selling for $150,000 are selling in today’s market at $225,000-275,000, when in the 2006 market some of these homes were $275,000-325,000. Please note that that still is an increase in value and helps demonstrate my theory of the 11/12 year cycle. This is certainly the time to buy, and I am not sure why any interested and qualified Buyer would not be considering it, or a Seller. My advice to my clients is consistently that if you have the equity and the desire, and a realistic expectation, the market is good – it is not a Buyers or Sellers market, it is a balanced market, and a normal market, so make that move. Rates are predicted to be rising in the near future, and with an increase in value coming, there really is no time like the present. Another strong factor is the First-Time Buyer and Move-Up tax credit, which will be expiring soon, so to take advantage you want to be under contract by April 30, or even sooner, as the back-log in refunds builds.
Buying at the low end of the cycle affords you the ROI in the long run. Real Estate is NOT a short term investment, and proves decade after decade that it is the surest way to build wealth, through real estate ownership, and investment in properties, and good timing (as well as advice from a qualified Real Estate Professional) anyone can grow their own empire. Carpe Real Property today!
And for 2011, I think we will see a 5% growth, followed by 2012 with a 7% growth in value. (Assuming no drastic changes to the economy and no major natural disasters).
